Correlation Between Global Warming and Trimble

Can any of the company-specific risk be diversified away by investing in both Global Warming and Trimble at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Global Warming and Trimble into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Warming Solut and Trimble, you can compare the effects of market volatilities on Global Warming and Trimble and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Global Warming with a short position of Trimble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Warming and Trimble.

Diversification Opportunities for Global Warming and Trimble

-0.13

Correlation Coefficient

Global Warming  Trimble

Good diversification

The 3 months correlation between Global and Trimble is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Global Warming Solut and Trimble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimble and Global Warming is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Global Warming Solut are associated (or correlated) with Trimble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimble has no effect on the direction of Global Warming i.e., Global Warming and Trimble go up and down completely randomly.

Pair Corralation between Global Warming and Trimble

Given the investment horizon of 90 days Global Warming Solut is expected to generate 13.65 times more return on investment than Trimble. However, Global Warming is 13.65 times more volatile than Trimble. It trades about 0.1 of its potential returns per unit of risk. Trimble is currently generating about 0.11 per unit of risk. If you would invest  31.00  in Global Warming Solut on December 5, 2024 and sell it today you would earn a total of  68.00  from holding Global Warming Solut or generate 219.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Global Warming Solut  vs.  Trimble

Global Warming Solut

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Warming Solut has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Trimble

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trimble has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Global Warming and Trimble

The main advantage of trading using opposite Global Warming and Trimble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Warming position performs unexpectedly, Trimble can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Trimble will offset losses from the drop in Trimble's long position.

The idea behind Global Warming Solut and Trimble pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.